&lt;P&gt;We have been studying three RNA-processing proteins: RNase III [a family of double-stranded (ds) RNA-specific endonucleases that initiate RNA interference], KsgA (a universally conserved methyltransferase that catalyzes the dimethylation of two adjacent adenosines in small-subunit ribosomal RNA), and ERA (a conserved GTPase that couples cell division with cell growth rate in bacteria and is a potential tumor suppressor in mammals). Previously, we have established a stepwise mechanism for RNase III to execute dsRNA cleavage, which can be extrapolated to other members of the family, including Rnt1p, Drosha and Dicer. This year, we have made significant progress in KsgA research and breakthrough advances in ERA research.&lt;/P&gt;&lt;P&gt;Among methyltransferases, KsgA and the reaction it catalyzes are conserved throughout evolution. However, the specifics of substrate recognition by the enzyme remain unknown. We have determined structures of KsgA, in its ligand-free form, in complex with RNA, and in complex with both RNA and S-adenosylhomocysteine (SAH, reaction product of cofactor S-adenosylmethionine), providing the first pieces of structural information on KsgA-RNA and KsgA-SAH interactions. Moreover, the structures show how conformational changes that occur upon RNA binding create the cofactor-binding site. There are nine conserved functional motifs (motifs I-VIII and X) in KsgA. Prior to RNA binding, motifs I and VIII are flexible, each exhibiting two distinct conformations. Upon RNA binding, the two motifs become stabilized in one of these conformations, which is compatible with the binding of SAH. Motif X, which is also stabilized upon RNA binding, is directly involved in the binding of SAH.&lt;/P&gt;&lt;P&gt;ERA, composed of an N-terminal GTPase domain followed by an RNA-binding KH domain, is an essential ribosome biogenesis factor. It binds to 16S rRNA and the 30S ribosomal subunit. However, its RNA-binding site, the functional relationship between the two domains, and its role in ribosome biogenesis remain unclear. We have determined two crystal structures of ERA, a binary complex with GDP and a ternary complex with a GTP-analog and the 1531AUCACCUCCUUA1542 sequence at the 3&amp;#8242;end of 16S rRNA. In the ternary complex, the first nine of the 12 nucleotides are recognized by the protein. We show that GTP binding is a prerequisite for RNA recognition by ERA and that RNA recognition stimulates its GTP-hydrolyzing activity. Based on these and other data, we propose a functional cycle of ERA, suggesting that the protein serves as a chaperone for processing and maturation of 16S rRNA and a checkpoint for assembly of the 30S ribosomal subunit. The AUCA sequence is highly conserved among bacteria, archaea, and eukaryotes, whereas the CCUCC, known as the anti-Shine-Dalgarno sequence, is conserved in non-eukaryotes only. Therefore, these data suggest a common mechanism for a highly conserved ERA function in all three kingdoms of life by recognizing the AUCA, with a twist for non-eukaryotic ERA proteins by also recognizing the CCUCC.&lt;/P&gt;&lt;P&gt;Our effort in structure-based drug development has been focused on two systems, Glutathione S-transferase (GST) and 6-hydroxymethyl-7,8-dihydroptein pyrophosphokinase (HPPK). GST represents a superfamily of detoxification enzymes, represented by GST-alpha, GST-mu, GST-pi, etc. GST-alpha is the predominant isoform of GST in human liver, playing important roles for our well being. GST-pi is overexpressed in many forms of cancer, thus presenting an opportunity for selective targeting of cancer cells. Previously, our structure-based design of prodrugs intended to release cytotoxic levels of nitric oxide in GST-pi-overexpressing cancer cells had yielded PABA/NO, which exhibits anticancer activity both in vitro and in vivo with a potency similar to that of cisplatin. This year, we have proposed structural modifications to PABA/NO for improved stability, solubility, and isozyme specificity. HPPK is a key enzyme in the folate biosynthetic pathway. Folate cofactors are essential for life. Mammals derive folates from their diet, whereas most microorganisms must synthesize folates de novo. Thus, the folate pathway is an ideal target for developing antimicrobial agents. In addition, HPPK is unique for microorganisms and is not the target for any existing antibiotics. Therefore, it is an ideal target for developing novel antimicrobial agents. Structure-based design and characterization of lead compounds are in progress.&lt;/P&gt;